Barack Obama, seen here in 2008, and Sen. Mark Kelly, a Democrat from Arizona.
Matt Rourke/AP; Ross D. Franklin/AP
- Sen. Mark Kelly is leading Democrats in a push for a gas tax holiday that lasts through the end of the year.
- Barack Obama, then a presidential candidate, torched a shorter tax holiday in 2008 when John McCain and Hillary Clinton pushed it.
- The history underlines the skepticism fellow Democrats and some economists have for the proposal.
Vulnerable Senate Democrats are considering an effort to suspend the federal gas tax as a sign to voters that Uncle Sam understands the pinch inflation has inflicted on American families.
But when this same idea was floated in 2008, then-Democratic presidential candidate Barack Obama mocked the suggestion that a gas tax holiday would make a difference.
“Well, let me tell you, this isn’t an idea designed to get you through the summer, it’s designed to get them through an election,” Obama said, dismissing an idea floated by both Sens. John McCain, his eventual Republican opponent, and Hillary Clinton, his primary opponent and future Secretary of State.
At a different rally, Obama, who was poised to become the Democratic Party’s presidential nominee, chided McCain.
“Half a tank of gas,” Obama said at a North Carolina rally. “That’s his big solution.”
Sen. Mark Kelly of Arizona said on Tuesday that suspending the gas tax through the end of the year was a “pretty obvious thing to do.” His legislation would shelve the 18.4 cent-per-gallon tax through 2022.
Senate Majority Leader Chuck Schumer hinted at the politics of the situation when he said that “eight or nine of our members have introduced this, including many of those that are in tough races in 2022.”
“We’re having a caucus discussion on it, but we haven’t yet taken a caucus position,” Schumer said, adding that a gas tax suspension was “one of many things” senators are considering as they try to lower costs for families.
Not every Senate Democrat was on board with the plan. Sen. Joe Manchin of West Virginia threw cold water on it and argued temporarily cutting the tax could further swell the federal deficit.
It also didn’t encounter much support on the other side of the aisle. Republicans lambasted the proposal and said it amounted to little more than an election-year stunt.
Sen. John Thune of South Dakota, the second-ranked Senate Republican, told reporters: “I think it’s just a clearly transparent political move to try and give political cover to a handful of Democrats that are up in states this year where gas prices are going to be a big issue.”
According to the latest Consumer Price Index report, energy remained the largest contributor to inflation in January, with gas prices up 40% from the previous year.
In 2008, McCain and Clinton proposed suspending the gas tax for three months. If enacted, the proposal by Kelly and Sen. Maggie Hassan, a New Hampshire Democrat who also faces a tough reelection campaign, would last just over 10 months. Representatives for Obama, Kelly, and Hassan did not immediately respond to a request for comment. The Biden White House did not reply to Insider’s inquiry either.
Obama himself was dogged by attacks that he flip-flopped on the issue during the 2008 campaign. As an Illinois state senator, he joked in 2000 that he wanted signs saying, “Senator Obama reduced your gasoline prices” to be placed on pumps in his district. CBS reported that he voted at least three times in support of suspending the state’s gas tax but opposed efforts to gut it permanently.
Congress has not raised the tax since 1993, despite the Highway Trust Fund repeatedly running low on funds. Kelly and Hassan’s proposal calls for general federal money to cover the costs of the holiday. The Committee for a Responsible Federal Budget estimates that such a holiday would cost $20 billion.
Some economists are also skeptical about the benefits. “I could easily see it being popular to propose a gas tax holiday. But if you actually got one then prices would barely go down,” Jason Furman, a former Obama economist, wrote on Twitter.